Easy being Green
On 18 November 2015, the boards of Enel and Enel Green Power announced the approval of the non-proportional spin-off of part of EGP into Enel.
The spin-off envisages:
· Assignement by EGP to Enel of the spun-off assets, essentially represented by (i) the 100% stake held by EGP in Enel Green Power International B.V., a Dutch holding company that holds investments in companies operating in the renewable energy sector in North, Central and South America, Europe, South Africa and India; and,
· The assets, liabilities, contracts and other legal relationships associated with those investments (the "Spun-Off Assets"); and - the retention by EGP of all remaining assets and liabilities other than those that are part of the SpunOff Assets (and thus, essentially, all Italian operations and a small number of remaining foreign investments).
The transaction will help simplify Enel’s current business structure and EGP have performed very well since its listing, registering an 82.7% increase in installed capacity, reaching the current 10.6 GW from 5.8 GW, and a 38% EBITDA increase to €1.8bn expected for full year 2015 (to date 12% of Enel Group’s EBITDA) from €1.3bn euros in 2010 (which was 8% of Enel Group’s EBITDA), which may help balance a weaker outlook elsewhere e.g. in Latin America.
The transaction does not require any regulatory approvals and is only conditional on: (i) EGP shareholder approval (2/3% of shares present and voting with a 20% quorum), (ii) Enel shareholder approval (2/3% of shares present and voting with a 20% quorum), and, (iii) recesso rights not exceeding €300m (recesso rights price using the 6M VWAP is €1.78 per EGP share).
Under Italian law, Enel are allowed to vote their c.70% stake in favour of the transaction making the EGP shareholder approval a “no brainer”, consequently minority shareholders have no choice but to accept the offer. We do not expect any issues in obtaining Enel shareholder approval.
Both shareholder meetings are scheduled for 11 January 2016 (the record date has not been set yet) and following the 2-month creditor period for the recesso rights the transaction should be on track to close/settle by mid/late March.
ENEL GREEN POWER (EGPW IM) / ENEL (ENEL IM)